Tax Liability of Manufacturers

August 18, 1959 BIR RULING NO. 379-59 The General Manager A & M Trading & Supply Co., Inc. 466 San Luis, Ermita, Manila S i r : Reference is made to your letter dated August 17, 1959 stating the following: "The A & M Trading & Supply Co., Inc. is engaged in packing of various chemical products: a) Pronto Dry Chemical Hand Fire Extinguisher b) Pronto Battery Reviver c) Pronto Radiator Cleaner "Before packing the above mentioned products we purchased various chemical products in the finished forms. We mix this chemical products together and pack them for sale to the public. We do not change the physical contents of any chemical used and employ one man in this operation. We would appreciate if you would advise us if we are right in assuming that we are not liable as manufacturer." In reply thereto, I have the honor to inform you that, under the facts presented by you, you are not mere repackers but manufacturers, pursuant to Section 194(x) of the Tax Code. As manufacturers, you are subject to a fixed tax of P20.00 per annum and to a sales tax equivalent to 7% of the gross selling price of the manufactured product less the total cost of the raw materials used in the manufacture which had been previously subjected to the same rate of tax as the manufactured product. aisadc Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue